Late Trains Aren't Amtrak's Biggest Problem

Amtrak has broken lots of ridership records lately, and it’s especially popular relative to air travel in the Northeast Corridor. But America’s train service recently announced that passenger trips fell (if only slightly) in 2015, and that revenue was a bit down, too. It’s dangerous to draw too many lessons from a single year, especially one that involved a terrible wreck, but there are two larger trends working strongly to Amtrak’s disadvantage.

The most obvious culprit is on-time performance. Amtrak has struggled with late train since a 2013 court decision ended the track priority it was granted by Congress over freight operators in the 2008 Passenger Rail Investment and Improvement Act (PRIIA). The Supreme Court remanded that decision last year in Amtrak’s favor, but the updated ruling isn’t expected for quite some time, and until then many passenger trains will continue to wait for cargo hauls.

But an even bigger change that’s occurred over the past few years is cutting into Amtrak’s success: the price of gas. It stands to reason that when filling up a tank rivals the cost of buying a train ticket, more people will choose to drive instead of riding the rails. And according to a new analysis of Amtrak ridership and revenue trends, low fuel prices account for as much of the overall problems facing train operations as on-time performance—if not more.

Amtrak recently asked the transport consulting firm Steer Davies Gleave to study the impact of both punctuality and cheap fuel on its ridership and revenue outcomes. The SDG team analyzed 10 years of data on station-pairs throughout the Amtrak system (ultimately dropping the Northeast Corridor from the study). They modeled these figures alongside on-time rates and gas prices while adjusting for outside economic factors like employment.

Lateness and gas prices each led to a decline in ticket revenue of about 4 percent, but fuel costs played a much bigger role when it came to ridership. The SDG models found that worse on-time performance from 2013 to 2014 led to a 2.7 percent dip in overall system ridership (outside the Northeast Corridor, where trains tend to run on schedule). But the drop in average pump prices from 2014 to 2015 led to a 4.2 percent ridership plunge.

CityLab / Feldman et. al, 2016

Late trains tend to hurt Amtrak’s long-distance routes more than others. Amtrak’s on-time rate is up a bit so far in 2016 over 2015—hitting 78.5 percent for the first three months of the fiscal year—but it’s post-PRIIA slump is noticeable across the board. Since the 2013 ruling, long-distance trains are a full hour late, driving the overall systemwide average delay to a half hour, and the SDG model predicts a 6.5 percent decline in long-distance ridership as a result of late trains.

Falling fuel prices, meanwhile, seem to do the most ridership damage to mid-length trips. The SDG model found that cheap gas didn’t much impact short Amtrak routes (less than 250 miles); these might be commuting or business trips, and thus too routine to change or taken on a company dime. Nor did it hurt on long routes (more than 550 miles), with many riders likely choosing these trips for the scenic experience rather than speed or cost. But routes between 250 and 550 miles took the biggest hit as gas prices fell; via the report:

These trips are more likely to be made by occasional train users, traveling for non-business reasons, and are long enough that fuel prices are a major factor in the decision whether to take a train or to drive.

Mark Feldman of SDG says Amtrak is already using this model to plan operations and budgeting. A better model would incorporate the Northeast Corridor, though it seems likely that gas would have a bigger impact on ridership there, too. Trains are less susceptible to delay between Washington, D.C., and Boston, because Amtrak owns most of the track in this region, so the fact that most intercity travelers in this region still drive suggests the price is too good to pass up.

It’s hard to see things changing anytime soon. People are more sensitive to high gas prices than low ones; Amtrak might see a ridership spike if gas climbs from $3.50 to $4 a gallon, but not if it goes from $2 to $2.50. Considering that average national fuel prices just hit $1.86 a gallon—its lowest mark since January 2009—the tipping point from driving to riding is a long ways off.